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Heritability of lifetime earnings

Abstract

Using twenty years of earnings data on Finnish twins, we find that about 40% of the variance of women’s and little more than half of men’s lifetime labour earnings are linked to genetic factors. The contribution of the shared environment is negligible. We show that the result is robust to using alternative definitions of earnings, to adjusting for the role of education, and to measurement errors in the measure of genetic relatedness.

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Acknowledgements

We would like to thank anonymous referees, Anders Björklund, Markus Jäntti, Jaakko Kaprio, Tomi Kyyrä, Tuomas Pekkarinen, Roope Uusitalo, as well as seminar participants at the Summer Meeting of the Finnish Economists (Jyväskylä), EALE Conference (Bonn), EEA Conference (Gothenburg), VATT (Helsinki), and SOFI (Stockholm) for useful comments. The usual caveat applies. We are thankful to Professor Jaakko Kaprio (University of Helsinki) for access to the twins data (Older Finnish Twin Cohort Study of the Department of Public Health in the University of Helsinki), to Statistics Finland for access to the register data (Finnish Longitudinal Employer-Employee Data FLEED), and to the Research Services unit of Statistics Finland for linking of the data sets. The Ethics Committee of Statistics Finland has given permission to use the data and all data work has been carried out following the terms and conditions of confidentiality of Statistics Finland.

Funding

Open access funding provided by Aalto University. This research has been financially supported by the Academy of Finland (project 127796), the Strategic Research Council (project Work, Inequality, and Public Policy, 293120), Jenny and Antti Wihuri Foundation, and Palkansaajasäätiö Foundation. The opinions expressed in the article are those of the authors and do not necessarily reflect the views of the funding sources.

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Hyytinen, A., Ilmakunnas, P., Johansson, E. et al. Heritability of lifetime earnings. J Econ Inequal 17, 319–335 (2019). https://doi.org/10.1007/s10888-019-09413-x

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Keywords

  • Earnings inequality
  • Heritability
  • Twins
  • Genetics